Executive Briefs

Inventory Optimization

For executives looking to strike the optimal balance between inventory levels and service to give their supply chain – and business - a competitive edge.

Supply chain leaders know that getting the right inventory to the right places, in time, is key to achieving target service levels and business goals. But making these optimal tradeoffs on a consistent basis is much easier said than done. This is especially true for companies that face high demand variability, have large SKU portfolios and or distribution complexity. One thing’s for sure: companies need to look beyond simple ABC inventory analysis in order to achieve this.

 

Many people assume that the only way to beat industry benchmarks for service is to put expensive inventory policies in place and hold high safety stock levels. As counterintuitive as this may seem, in fact, the opposite is true.